Cambodia conducts audit on NagaWorld casino

NagaWorld which is owned by Hong Kong-based NagaCorp has enjoyed a number of benefits over the last twenty years. Some of these benefits include an exclusivity agreement till 2035 allowing NagaWorld to be the sole casino within a 200 kilometer radius from Phnom Penh and a very beneficial tax agreement with the government. Cambodia charges a flat twenty percent on corporate profit tax but NagaWorld is required to pay less than 2 percent on its gaming revenues.

The casino also has other benefits such as special exemptions from non-gaming revenues which means NagaWorld does not have to pay withholding tax, value-added tax, standard profit tax and taxes on unmovable assets. The government and the casino have a deal which requires NagaWorld to pay a one-time tax on non-gaming revenues each year. Back in 2002, the casino paid just $30,500 each month on non-gaming revenues but that amount has increased considerably over the years to $214,338 per month during 2015.

Based on the company’s 2015 financial statement, NagaCorp made $503.7 million in total revenue and $327.8 million in gross profit. The company paid just $6.9 million in taxes so far but has now been presented with another tax bill of $9.4 million after the Ministry of Economy and Finance (MEF) found discrepancies in its 2015 non-gaming entertainment tax filings. The government is currently conducting an audit to ensure that NagaWorld pays all its tax dues.

“

“

In a statement, Ros Phirun, deputy director of the finance industry department at MEF said The audit is ongoing and we have yet to finalize how much NagaWorld owes for their non-gaming operations. The reason why we are doing this is because we found last year that they needed to pay more [in taxes]

”

Phirun stated that the government would also be looking into the taxes of other casino operators in the country but admitted that it was difficult to figure out non-gaming profits for most casino operators close to the border as they did not have sufficient bookkeeping for the government to determine how much customers pay and how much were the actual net profits. This was the reason why the government preferred lump sum payments on non-gaming operations. Phirun also stated that the government planned to impose similar tax measures on $369 million Naga2 development which is slated to open in 2017.